Month: August 2014

Summary: Customer satisfaction is a central pursuit for any company, and yet we have few clear tools to manage it. In this article we look at the usual suspects through the perspective of our web empowered customers. While these tools do help we urgently need to expand their scope, cut through the consultant speak and look for specific opportunities.

Questions may not cover what customer really cares about, answers might be biased.

Needs to be complemented with more questions, doesn't tell us where to improve.

Applies only to customers who have contacted customer service, not the entire universe of clients.

When we talk about customer satisfaction we usually mean surveys we ask customers to fill after a sale, which we can then aggregate and follow through time to see how we’re doing; the problem is the surveys themselves can be a nuisance for customers (for instance if they’re long); they could be giving answers devoid of meaning to get away as quickly as they can; the questions can be interpreted differently from what we meant (the customer might not have the heart to give the overall experience a bad mark for fear of harming sales staff, or on the contrary might give them poor marks for something that is beyond their control); or the questions might not make sense to them:

Customer rates his overall satisfaction 8 out of 10.

Next question in the survey: Why did you not rate us 10 / excellent?

Customer thinks to himself: “Because perfection is only the purview of the gods, so no one ever gets a 10”. We could normalize but then other customers might be willing to give it a 10.

The first lesson is that we need to adapt our customer satisfaction questions, how and when they are asked as they are themselves part of our customer’s experience: do they feel that we really care or that we are going through the motions? Does it capture the aspects they care for? Is it an additional hassle to respond?

From our customers’ perspective their experience has expanded thanks to the web, so it refers to aspects beyond the scope of the traditional satisfaction survey and the control of our sales staff. Our customers now find answers to their questions through other consumers on the web, while ignoring our advertising and marginally remembering periodic sales and promotions. When asking a question (does the color wear off quickly?) they get answers from their peers, which are not necessarily right but point to a much bigger experience through which our customer is discovering our product’s attributes, quality and value. As I have argued before, it is in our own interest not just to respond to our customer, but to lead them through this wider and deeper experience, so they can achieve an overall better result and a productive and even fun experience at every step of the way.

The second lesson is that we need to respond to these new expectations through the web, become another trusted peer in our customers’ network, and help our sales staff be in sync. With this expanded definition of our customers’ experience we then need to adapt our notion of their satisfaction.

The Net Promoter Score (NPS) introduces the concept of a much shorter survey, usually consisting of one of two questions, such as “would you recommend us?”, which seek to summarize our customer’s overall experience; it has the advantage of addressing some of the concerns with longer surveys. We can then choose to focus on our “promoters” and / or “detractors”, which seems to play well with our customer’s interaction with our product through the web, particularly the idea of our brand’s fans.

The first problem with NPS is that it doesn’t tell us where to improve, which leads us to ask more questions, which in turn takes away its advantage over normal surveys.

The second problem is that while it sounds nice to focus on our “promoters”, “detractors” are a lot more vociferous on the web, so unless we have a plan to deal with them we might find ourselves putting out many, many fires.

The third problem is that satisfied customers are not necessarily promoters, much less fans of our brand. Brands with real fans (as opposed to fake Facebook like “fans”) took years to cultivate them, and that relationship might not be as profitable as we would like it to be: while Apple is a prime example of hard core fans for their Mac PCs, their numbers were so low compared to other brands that the company almost died several times, and resurrection only came thanks to a much wider audience through iPods, iPhones and iPads, people who generally are fans of the brand if not quite as rabid as the Mac crowd.

The third lesson is that while a simple, easy to grasp indicator such as NPS can help us see which way the wind is blowing, it doesn’t tell us where to invest, and may even derail our efforts.

Customer Effort introduces an interesting concept with respect to Customer Service: instead of trying to exceed our customers’ expectations we should deal with the specific issues they struggle with and spend more effort trying to solve, quickly and efficiently. This has the advantage of letting us know where to invest to improve customer satisfaction.

The problem with the Customer Effort approach is that its power as predictor of customer loyalty only applies to post sales Customer Service, not to the customer’s entire experience: as a general rule we do want to exceed our customers’ expectations when they are looking for our product, which is a different mindset from solving post purchase problems efficiently: meeting or exceeding those expectations might indeed preclude problems from occurring in the first place.

The fourth lesson is that if we expand the concept of customer effort to the entire customer experience as seen through the web we might find something even more useful: how much effort does our customer have to spend to find out which options are best for him? What works best for his budget? Which product attributes are more important? It’s not so much a series of problems as a series of opportunities to improve our customer’s overall result, his experience at every step of the way, and his satisfaction; this would have the added advantage of letting us know precisely where to invest.

To improve our customers’ satisfaction and hence attract and retain more of them we need to understand that their expectations are changing as their experience is now wider and deeper thanks to the web; that is to say, thanks to their interaction with other consumers, through which they are discovering our product’s attributes and what is best for them; and it is through the web itself that we need to engage our customers to improve their satisfaction. The web can help us complement our sales staff’s efforts and help them be in sync with our customer’s new expectations.

Summary: As we seek a competitive advantage and to better serve our customers we come across concepts that seem nice, but might be difficult to implement or fit together: Customer Relationship Management (CRM), Knowledge Management, Customer Service. To help us cut through the jargon we can use our customer’s perspective on our product, which has been changing thanks to the web.

The subject of CRM, Knowledge Management, and Customer Service has been knowledge about our customers, we can sum up how they have been generally used:

Tool or function.

Knowledge Management.

Customer Relationship Management.

Customer Service.

Actual use.

Gather and distribute staff knowledge about customers.

Mine data to learn about customers.

Deal with customers after the purchase.

Goal.

Efficiency, sales.

Improve customer loyalty.

Solve post purchase problems, complaints, warranties.

All of these tools and functions are useful, although their actual benefits might not match their grandiose names; CRM for instance has been synonymous with loyalty programs, not actually managing entire relationships; and customer service is a euphemism for solving whatever problem the customer has after the sale.

We should also point out that these projects may imply substantial investments and their return might take some time, depending for instance on our product sales cycle (buying toothpaste is a matter of months while a refrigerator takes decades, so hanging on to that loyal customer might not be easy).

Our own customer’s knowledge about our product helps us see that their experience can be much broader and deeper than what Knowledge Management, CRM and Customer Service cover:

With a simple web search our customer can find not only the best, but how other consumers have fared in the long run, and discover the myriad components that make up not just a product but the entire experience surrounding it: What’s the best quality? Which are the essential components? Which are nice to have but we can do without? What should we avoid?

Our customer can also contribute to other consumer’s quests: whether staff is rude or courteous, warranty responses quick or not, which products have worked out better in the long run, if a price is fair…

The difference between what we know about our customers and what our customers themselves know about our product is crucial.

We could give the tools that help us deal with our customer’s perspective a new name, such as Customer Knowledge Management, but that would miss the point, which is that we need to think and act according to the much bigger customer experience that encompasses all these tools. Marketing has long identified all the parameters that make up our product’s value, but seeing it from our customer’s perspective lets us answer the hard questions:

Is our customer loyal? Can loyalty be bought with bonus points or are we confusing it with something else? Are we selling our customers and ourselves short?

Does our customer appreciate our product’s quality and attributes? Or do we need to keep enticing him with lower prices? Is our in store staff prepared for our customer’s wider questions?

Does our customer appreciate a better experience, such as faster turnaround, efficient service, and how much is he willing to pay for it?

What are the limitations of CRM, Knowledge Management, Customer Service and traditional advertising for the greater customer experience?

We can already draw several lessons:

For the first time we have the means for our customers to tell us directly what they are looking for, what they are and are not finding, as opposed to indirect means like data mining, our staff’s interpretation of what customers want, or biased surveys.

We need to see our customers’ greater experience as an opportunity for growth and innovation, to complement the efficiency and loyalty goals for Knowledge management, CRM and Customer Service. This can help us put these programs in perspective, particularly when we are in need of growth and not just internal process improvement.

We need to use the same medium our customers are employing to expand their experience: the web. This means thinking beyond our own stores or distribution channels, beyond the moment of purchase and more about everything that leads to it and everything that happens after.

To meet our customer’s new expectations in their expanded experience through the web we need to take several actions:

We need to be more proactive to engage more proactive customers. The web is the only mass medium that lets us be a direct counterpart in our customer’s conversation.

We need to give our customers the proper incentives to contribute and make them feel appreciated when they do so. We also need the right tools and incentives for our own staff to use our customer’s contributions.

We need to change our mindset to see our customers as active agents and not just as the recipients of our actions, as information partners and not merely as information sources. This might be the key to everything else and may require it’s own plan to keep it from becoming an empty slogan.

We need to expand our data mining through the web beyond what happens at the store to feed CRM and Knowledge Management systems, while keeping our customers’ privacy concerns in mind and their information safe; the opportunities of the wider customer experience go beyond merely attempting to track our customers on the web.

We also need to take into account the fact that customers might know more about the experience surrounding our product but they are not product or market experts, following them blindly might lead us to Homermobiles.

CRM, Knowledge Management and Customer Service are all useful and necessary, but their traditional uses respond to a more narrow, inward looking view of our customer’s experience, which has been expanding thanks to the web. We can use our customer’s wider experience as a focal point, to understand what each can contribute, as well as how to use the web itself to engage our customers.